Adcock delays vote on $1.2bn CFR offer

Companies / 9 January 2014, 2:15pm

Reuters

A pharmacist counts pills in a pharmacy. File image: Reuters

Johannesburg - South African drugmaker Adcock Ingram expects to further delay until mid-February a shareholder vote on a $1.2 billion takeover offer from Chile's CFR Pharmaceuticals because it is still waiting for regulatory approval.

Adcock shareholders in December voted to postpone the vote until this month to give themselves more time to consider the sweetened offer from Santiago-based CFR.

But the vote is now likely to be delayed until mid-February, because regulatory approval of shareholder documentation was taking longer than anticipated, Adcock said on Thursday.

It did not give details of the documents or the regulatory issues. While South Africa's government has backed the deal, the state-run pension fund, Adcock's top shareholder, has rejected CFR's offer.

CFR, which first announced its cash and stock bid in July, last month increased the offer by 1.6 percent to 12.8 billion rand ($1.2 billion) to woo the Public Investment Corporation (PIC), which owns 22 percent of Adcock.

The PIC has said it does not want to swap its Adcock stock for that of CFR, saying more value could be had from changes in Adcock's management.

The deal requires the backing of shareholders owning 75 percent of Adcock and is almost certain to fail because the PIC and a rival bidder, Bidvest Group, together own around 29 percent.

Bidvest has gone straight to shareholders with an all-cash offer for a little over a third of Adcock.

CFR has accused the PIC of protectionism. The fund has said it supports foreign direct investment as long as it has “predictable long-term benefits for the South African economy”.

Shareholders of closely held CFR are due to vote on a capital raising required for the deal on Friday.

CFR, which has operations in Latin America and Asia, wants to extend its reach into fast-growing Africa.

Bidvest, with businesses spanning car sales to catering, is interested in Adcock's pain killers and other over-the-counter drugs.

Adcock has underperformed in recent years, dwarfed by local rival Aspen Pharmacare which has aggressively pushed into overseas markets while Adcock has remained largely dependent on South Africa.